Re: st: biprobit with endogenous binary

[Partha Deb <partha.deb@hunter.cuny.edu>]

Luca,

In the example you refer to:

biprobit (nss = female mma)(mma = female read write)

nss and mma are endogenous and mma enters the nss equation.  For 
identification, what this requires is that there be at least one exogenous 
variable in the mma equation that is not in the nss equation.  In the example 
there are 2 such variables (read and write).  Note also that if you have mma 
in the nss equation, you cannot also have nss in the mma equation, i.e., while 
simultaneity can run in both directions in linear system, it cannot in a 
binary system.

Maddala (1983) "Limited dependent and qualitative variables in econometrics" 
is a standard reference for this.

Hope this helps.

Partha


luca.tiberti@unifi.it wrote:

> Dear Partha,
> thanks for your reply. Could you kindly be more detailed in your reply
> because I did not understand very well. Sorry.
> Yesterday I visited 
> http://www.gseis.ucla.edu/courses/ed231c/notes1/biprobit.html
>
> and in the last example the use the biprobit command instrumenting the
> endogenous variable. I do not understand the restrictions you were
> speaking about.
>
> Thanks a lot,
> Luca
>
>
>
> > Yes, subject to the usual parametric assumptions and appropriate exclusion 
> > restrictions.
> >
> > Cheers,
> >
> > Partha
> >
> >
> > Marcello Pagano wrote:
> >
> > > For Luca Tiberti:
> > >
> > >
> > > > > Good Day!
> > > > > I have a similar system of equations:
> > > > >
> > > > > y1=x1+x2
> > > > > y2=y1+x3+x4
> > > > >
> > > > > where y1 and y2 are both binary variables and, in particular, y1 is in
> > > > > y2 an endogenous regressor and y2 is the main outcome variable. My
> > > > > question is whether biprobit is the right command to instrument y1. I
> > > > > think yes, but I am not sure.
> > > > >
> > > > > Thank you very much,
> > > > >
> > > > > Luca
> > > > >   
> > > *
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> > --
> > Partha Deb
> > Department of Economics
> > Hunter College
> > ph:  (212) 772-5435
> > fax: (212) 772-5398
> > http://urban.hunter.cuny.edu/~deb/
> >
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> > 	- Bob Marley
> >
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--
Partha Deb
Department of Economics
Hunter College
ph:  (212) 772-5435
fax: (212) 772-5398
http://urban.hunter.cuny.edu/~deb/

Emancipate yourselves from mental slavery
None but ourselves can free our minds.
	- Bob Marley

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